Hydrogen will meet only 5pc of global energy demand in 2050, roughly a third of the level consistent with a net-zero pathway, according to risk management firm DNV’s latest Energy Transition Outlook.

This level of demand will require 250mn t/yr of production by 2050, an estimate far lower than other forecasts. Scenarios outlined by other organisations estimate 700-800mn t/yr of production by 2050 depending on future policy.

DNV foresees a 27.5pc share for blue hydrogen, 25.5pc for grid-connected electrolysis, 17.5pc for dedicated solar-based electrolysis, 13pc from dedicated wind-based electrolysis and 1pc from dedicated nuclear-based electrolysis.

“Blue hydrogen will gain significant market share, especially in ammonia and methanol production” DNV

This forecast represents a higher share for blue hydrogen production than those by most other organisations, totalling some 78mn t/yr by 2050. Of this, 68mn t/yr will be produced in the same facilities in which it is consumed.

Thinktank the Energy Transitions Commission predicts blue hydrogen will account for 75-120mn t/yr, or 15pc, of a 500-800mn t/yr total, while research firm Rethink Energy predicts “almost all” of the 735mn t/yr of 2050 demand it foresees will be met by green hydrogen. The IEA predicts blue hydrogen will meet 240mn t/yr, or 40pc, of its total forecast hydrogen demand of 600mn t/yr.

DNV says blue hydrogen will still be widely used in industrial applications, despite concerns over capture rates and cost.

“With the continued reduction in capex for methane reforming (particularly autothermal reforming technology) and carbon capture, and with reducing risk premiums for hydrogen investments, and increasing carbon prices, blue hydrogen will gain significant market share, especially in ammonia and methanol production,” says the DNV report.

Green machine

The cost of green hydrogen production will decline from around $5/kg to $2/kg in 2030, largely thanks to a fall in renewable generation costs and a 25-30pc reduction in the capital costs of electrolysers, according to DNV.

Costs fall even further towards 2050 due to a growing share of variable renewable energy sources in the grid mix.

Pipelines will transport hydrogen up to medium distances within and between countries, but almost never between continents, the report says.

Ammonia is likely to be the zero-emission fuel of choice for international shipping, but DNV foresees a limited role in maritime trade due to high reconversion costs.

“Less than 2pc of global hydrogen will have spent time on keel in 2050,” the report says.

The bulk of hydrogen end-use will be for manufacturing (61pc), followed by transport (17pc) and buildings (14pc), with the remainder going to electricity generation and other uses.

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Author: Tom Young